Berney,
I use other technicals also, the 25 day a/d sum is a trending indicator which tells me which way the real trend is so that I can ignore the little zig zags that jerk everyone around along the way.
How my position was taken? Here's how:
1) Of course, I could always be wrong, but if you look at the DOW chart over the last six months of 1997, you'll see an inverted H & S pattern. This sell off from July just came back and tested that neckline. So far, so good...heck, anything could happen, this market could go to hell for real, but I took a nibble at it and saw the a/d indicator narrowing the spread. Now, for a moment, we're positive...
2) I believe a nine month cycle low is due about now.
3) The day of the low, the DOW and SP put in a key reversal. That is typical for the end of a move for a while anyway, although it could break within a few weeks.
4) We had another, yet smaller, key reversal in those indices the other day and the DOW posted an inside day the following day. I see that as very constructive.
Now that the a/d indicator is beginning to turn positive, I gotta be bullish right here.
If the markets crash later today, I didn't write this post.
GZ |
